If You Want a Larger Tax Refund, Do Not Forget About These Common Tax Breaks and Deductions
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If You Want a Larger Tax Refund, Do Not Forget About These Common Tax Breaks and Deductions

To get the biggest tax refund in 2025, claim all the tax credits and deductions you are eligible to receive

August 10, 2025

Many taxpayers aim to maximize their refunds, yet every year millions leave money on the table by failing to claim deductions and credits they qualify for. Some tax breaks require itemizing, while others can be claimed even if you take the standard deduction. Reviewing the most common deductions now can help you capture every dollar you are entitled to. If you discover you missed one in a prior year, you can generally amend your return for up to three years.

Personal property taxes

If you purchased a car, boat, or real estate in the past year, state and local personal property taxes may be deductible. For homeowners, mortgage interest statements often list property taxes paid, but you must also include any additional taxes on vehicles, boats, or trailers. In North Carolina, vehicle property taxes are often billed along with registration renewal fees, so keep those receipts for your records.

Medical expenses

For tax year 2025, you can deduct unreimbursed medical and dental expenses that exceed 7.5 percent of your adjusted gross income if you itemize. Eligible expenses include doctor visits, hospital care, prescriptions, medical equipment, and certain travel costs related to medical care. Keep detailed records and receipts, including mileage logs for trips to and from medical facilities.

Charitable contributions

Cash donations and the fair market value of donated goods to qualified charities can be deducted if you itemize. Remember to get written acknowledgments for contributions of $250 or more. North Carolina taxpayers can deduct qualifying donations to organizations such as the North Carolina Consumers Council if they meet IRS requirements. If you make recurring donations, consider consolidating them in one tax year to exceed the standard deduction threshold and benefit from itemizing.

Moving expenses

Most moving expenses are no longer deductible for federal taxes except for active duty military members moving due to a permanent change of station. If you meet the criteria, you can deduct the cost of transporting household goods and personal effects, as well as travel to the new location. Be sure to keep all receipts and documentation.

Mortgage refinancing

When you refinance your mortgage, points and certain loan origination fees may be deductible. If you used the loan to improve your home, you might be able to deduct these costs in the year paid. If the refinancing was for reasons other than home improvement, points are generally deducted over the life of the loan. Check your Form 1098 and lender’s documentation for details.

Casualty and theft losses

Losses from federally declared disasters may be deductible if they are not covered by insurance. This includes damage from hurricanes, floods, wildfires, or other disasters. The loss amount must be reduced by $100 and by 10 percent of your adjusted gross income. North Carolina residents should confirm with the IRS whether a disaster in their area has been declared for tax relief purposes.

Home office expenses

If you are self-employed and use part of your home regularly and exclusively for business, you can deduct a percentage of your mortgage interest, rent, utilities, and other expenses. The simplified option allows $5 per square foot up to 300 square feet. This deduction is not available to W-2 employees under current federal law, even if you work from home for your employer.

Student loan interest

You can deduct up to $2,500 of interest paid on qualifying student loans, even if you do not itemize. This deduction is phased out at higher income levels. Payments made by someone else, such as a parent, are treated as if they were given to you and then paid toward the loan, allowing you to claim the deduction if you are legally obligated to pay the loan.

Dependent care credit

If you paid for care of a qualifying child under 13, a spouse, or another dependent who is physically or mentally unable to care for themselves, you may qualify for the Child and Dependent Care Credit. This credit can cover up to 35 percent of qualifying expenses depending on income, with a maximum of $3,000 for one qualifying individual or $6,000 for two or more. Care must be work-related, and you must report the care provider’s information on your return.

Sales tax

You may deduct either state income taxes or state sales taxes if you itemize. North Carolina’s sales tax rate varies by county, so using the IRS sales tax deduction calculator can help you estimate the allowable deduction, especially if you purchased high-cost items such as vehicles, boats, or building materials.

Job search expenses

Job search expenses are no longer deductible for most taxpayers under the current federal tax law, but if you are claiming a prior year (before 2018) on an amended return, you may be able to deduct costs such as resume printing, postage, and travel for interviews if they exceed 2 percent of adjusted gross income. Self-employed individuals may deduct certain job-related expenses as business expenses.

Tax preparation fees

For most taxpayers, the deduction for tax preparation fees is suspended through 2025. However, if you are self-employed, a farmer, or a landlord, you may deduct these costs as a business expense on the appropriate schedule. Keep receipts for payments to preparers or software providers like TurboTax or H&R Block.

North Carolina tax considerations

North Carolina allows some deductions and credits that differ from federal rules, such as deductions for certain retirement benefits or education expenses. You can review the current list of allowable deductions and credits at the NC Department of Revenue website. Always check state requirements separately to ensure you are not missing additional savings.

Steps to maximize your refund

  • Keep organized records of deductible expenses and supporting documentation year-round
  • Review IRS Publication 17 for a complete list of deductions and credits
  • Consider itemizing if your total deductions exceed the standard deduction
  • Use IRS Free File or reputable tax software to check for overlooked deductions
  • Consult a qualified tax preparer if your situation is complex

By understanding the rules for these deductions and credits, and by keeping careful records, you can increase your chances of receiving the largest possible refund. Whether you file on your own or with professional help, the key is to prepare early, stay organized, and review both federal and state tax breaks you may qualify for.